dedicated IP vs. shared IP

Dedicated IP vs. Shared IP: Which Is Better in Ecommerce?

Of all the great rivalries in history—Edison vs. Tesla, Dunkin’ vs. Starbucks, Bette Davis vs. Joan Crawford, Ariana vs. Beyonce—dedicated IP vs. shared IP probably doesn’t come anywhere close to topping the list.

While we wouldn’t necessarily make the argument that it should, we firmly of the believe this faceoff isn’t discussed enough in ecommerce, especially in the context of email marketing.

The best ecommerce brands care about email. A lot. They know how to use the powers of targeted email campaigns to reach first-time buyers and loyal customers alike. They carefully segment their lists to guarantee only the most engaged customers receive their emails, bolstering their sender reputation at the same time.

Just as in real life, your reputation matters in email marketing—specifically your sender reputation. The internet protocol (IP) you choose has a direct impact on how your emails are delivered across internet service providers (ISPs) and whether you consistently hit the inbox.

Achieving a strong sender reputation takes careful, calculated work and a whole lot of marketing know-how. But it all starts with which type of IP your ecommerce site decides to go with. So which internet protocol should you choose? Let’s get into the pros and cons of dedicated IPs and shared IPs in ecommerce.

What is an IP address?

Before we get into the ramifications of what choosing either a dedicated IP or a shared IP entails for your ecommerce brand, let’s take a step back and start with some basic definitions.

  • IP address – A computer address from which emails are sent that serves as a unique identifier email

Every IP address has a reputation associated with it, which determines whether or not your emails get marked as spam. Consequently, a low sender reputation means your emails won’t get in front of your target customers—you don’t want this to happen!

  • Dedicated IP address – An IP address that’s “dedicated” only to your ecommerce site

With a dedicated IP, your brand essentially has the power to choose its own adventure, since you solely determine the reputation and deliverability of your IP. In general, medium-to-large-sized businesses usually opt for dedicated IP addresses since they have more resources to devote to their email marketing—much more on this in a bit.

  • Shared IP address – A single IP address used by multiple senders within one web server; most often used by smaller businesses who use email service providers (ESPs) as their email marketing platform.

At this point, you might be thinking, “Shared IPs sure do sound a whole lot less complex! Why work so hard to build the reputation of your own IP when you can take advantage of a shared IP? After all, isn’t sharing caring?”

Well, yes and no. As with most marketing decisions, your choice of IP entirely depends on the goals you’ve put in place for your marketing strategy, as we’re about to see.

When a dedicated IP address is best

As an ecommerce brand, you likely see email marketing as one of your top tools for reaching customers and driving revenue. Because of that, you know how important it is to practice good email list hygiene and stay compliant with best practices to avoid being branded a spammer. In other words, you need to stay on top of your email marketing game.

Here’s where dedicated IP addresses come into play. In comparison to shared IPs, dedicated IPs are far better for your sender reputation. Why? Since your ecommerce site is the sole controller of your IP, you don’t have to worry about whether other senders on your shared IP are potentially damaging your own sender reputation.

Your sender score is dictated by your email open and click-through rates, as well as your email delivery rates. If you use a dedicated IP, you’re in control and don’t have to worry about another brand messing up your sender score. This should put your email marketing mind at ease. You have full power over almost every aspect of your emails, so you can just focus on making your emails great.

Already using a dedicated IP? Ideally, you have to stay up-to-date on the latest email dos and don’ts, as well as any email compliance issues that might arise. Also, you have to constantly monitor your email performance and make changes as needed. Your brand’s email reputation is fully in your control and you can be sure you’re doing the best possible job to maintain your sender score.

Verdict: It requires more upkeep, but if you have the capacity to dedicate resources to your email marketing strategy, a dedicated, unique IP address is the way to go. You can completely control your sender reputation and build a highly engaged email list that will drive real value for your brand.

When a shared IP address is best

A shared IP takes far fewer resources to manage. If you’re a small business with a tiny marketing team, you probably can’t dedicate a lot of time to IP warming or continuously monitoring your sender reputation. Because of that, a shared IP may be the right choice for you.

The good news is that if you opt for a shared IP, a lot of the work has already been done for you. You don’t need an entire email team dedicated to poring over the latest email marketing trends, and you don’t have to worry about following best practices for every email blast you send.

However, your business will always be at risk of having someone else ruin the IP sender reputation with an accidental, spammy send. The convenience of using a shared IP can’t be denied, but there are specific risks of sharing your IP you have to accept if you choose this option.

Verdict: If you choose a shared IP, go into it knowing your sender reputation is not fully in your control. These risks might not be worth it for every B2C brand, but for smaller businesses who aren’t large volume senders, shared IPs could be the right choice in the short term until your business grows.

The benefits of dedicated IPs vs. shared IPs

Still not sure which type of IP is right for your ecommerce site or B2C brand? We’ve broken down the upsides and downsides of both into a nifty chart, which will hopefully clear up any misgivings you might have about your choice.

Before you make your final choice, here’s one more benefit of dedicated IP addresses to consider:

You can have separate IP addresses for your promotional and transactional emails. That way, if a recipient marks your promotional emails as spam, they’ll still receive order confirmations and account notification emails.

As you can maybe tell, we recommend that all but the smallest B2C brands choose a dedicated IP address. The bottom line is that dedicated IPs provide peace of mind that shared IPs can’t. As a marketer, you should focus on producing eye-popping emails that get your target customers to check out your products. You don’t want to spend time worrying about whether another brand under your shared IP might mess up your sender score.

Email is still the number one huge revenue driver in B2C marketing, but it takes more than creating and sending good content. With a dedicated IP address, your B2C brand can have complete control over email deliverability and sender reputation, ensuring a high-quality email experience from start to finish.

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